Polish PM quits, party chief Kaczynski to take over

WARSAW, July 8 (Reuters) Poland's popular Prime Minister Kazimierz Marcinkiewicz has resigned following growing tensions with leaders of his Law and Justice party.

The party said it recommended its leader Jaroslaw Kaczynski, twin brother of President Lech Kaczynski, to take over as the next prime minister.

''The political council of Law and Justice has been informed of the resignation of Prime Minister Kazimierz Marcinkiewicz and unanimously recommended Jaroslaw Kaczynski for new prime minister,'' a party spokesman said yesterday.

Party sources have said Marcinkiewicz has become increasingly at odds with the powerful Kaczynskis, the world's only twins to hold two highest posts in any country, over appointments to various state posts.

Both have promised a radical break with what they saw an unholy alliance of political and business elites with people of the old communist regime and were frustrated by the slow pace of change at the helm of top state owned firms and agencies.

Party sources said Marcinkiewicz's meeting with opposition leader Donald Tusk this week and earlier appointment of his aide as new finance minister were the last straw for the party leadership.

''Kaczynski will change the finance minister as one of his first moves. Marcinkiewicz appointed (Pawel) Wojciechowski and that was the last straw and then he met Tusk,'' said a source close to the ruling Law and Justice.

Kaczynski does not plan any other major changes in his cabinet, the source said.

SAFE PAIR OF HANDS Late last month Marcinkiewicz dismissed his finance minister and deputy Zyta Gilowska after she was accused of collaborating with the communist-era secret police only to offer her a new cabinet post just days later to speed up a probe into the allegations. But party sources said Marcinkiewicz's swift appointment of a new minister, without consulting his party, hurt him more than the controversy.

Gilowska, who denies the allegations, turned down the offer and party sources said she would not return to the cabinet.

Marcinkiewicz, who only hours earlier denied having any problems with his party, met Tusk to seek his backing in parliament for several economic bills. But Tusk later cited him as describing his situation as ''getting more complicated'' which provoked furore among ruling coalition politicians.

Financial markets have viewed Marcinkiewicz, his party's former chief economic spokesman, as a safe pair of hands, but with little political clout to carry out independent policies.

Many believed that Marcinkiewicz's popularity ratings, well above those of both Kaczynski's, were a thorn in the eye of the ambitious brothers and would eventually lead to his dismissal.

But many political analysts thought that Marcinkiewicz's popularity was too much of an asset for the party to let him go before local government elections due in November.

''This is extremely bad. He was the last person in the government who understood the market view, the economy, the outside world in general,'' said Lars Christensen, senior central European analyst with Danske Bank.

''We now have basically a government of nationalists and people with an extremely parochial view of things. This is just bad news on top of bad news.'' Reuters PDS VP0430